India’s outsourcing landscape is undergoing a significant transformation due to the exponential growth of Global Capability Centers (GCCs). These centers, established by multinational corporations, are increasingly taking on high-value, core technology work in-house, a shift that is reshaping the traditional people-led IT outsourcing model.
In fiscal year 2024, GCCs in India experienced a remarkable 40% growth rate, while the top five Indian IT companies saw negative to sub-5% growth. This trend continued into fiscal year 2025, with GCCs projected to maintain double-digit growth. This indicates a foundational shift in the industry, with GCCs evolving beyond mere back-office operations to become strategic hubs for innovation, research and development, and high-value technology roles.
The rapid expansion of GCCs is having a direct impact on the employment landscape. In FY24, GCCs added 90,000 net new employees, surpassing 100,000 in FY25. In contrast, India’s top IT companies saw a mere 13,500 headcount increase in FY25, following a reduction of 64,000 in FY24.
This suggests a shift in talent demand, with GCCs attracting skilled professionals, especially in areas like AI and data roles, often offering 12-20% higher salaries than IT services for comparable positions.
Multinational companies are increasingly choosing to insource core technology functions by expanding their GCCs in India, rather than relying on third-party IT service providers. This is particularly evident in sectors like Banking, Financial Services, and Insurance (BFSI), where many large multinational banks and financial services firms now have substantial GCCs in India, some employing more people than mid-tier IT firms. This insourcing trend is contributing to a slowdown and even layoffs in the conventional outsourcing sector.
GCCs are no longer just cost centers; they are becoming crucial decision-making hubs. They are heavily investing in AI-driven innovation and are focused on driving digital transformation. This evolution is positioning India as a global innovation powerhouse, with over 1,700 GCCs already operational, accounting for more than 50% of the world’s total.
While major Tier-1 cities like Bengaluru, Hyderabad, and Chennai continue to be primary bases, there’s a growing trend of GCCs expanding into Tier-2 cities such as Kolkata, Nagpur, Noida, and Pune. This shift is driven by factors like lower operating costs, a growing talent pool, and improved physical and digital infrastructure in these emerging hubs. This decentralization is fostering inclusive development and creating jobs beyond traditional metropolitan areas.
The rapid growth and evolving role of GCCs signify India’s strengthening position as a leading global hub for technology innovation and business services. While this transformation presents challenges for traditional IT outsourcing firms, it also underscores India’s ability to adapt and lead in a rapidly changing global technology landscape.
IT services companies are now proactively collaborating with GCCs to jointly shape and participate in their transformation and innovation agendas.
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